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KRA woos landlords with mobile tax payment option

Wednesday March 2 2016

Times Tower, Kenya Revenue Authority headquarters in Nairobi. A lawyer attached to KRA customs department was on July 12, 2017 found murdered. PHOTO | SALATON NJAU | NATION MEDIA GROUP

In Summary

The taxman expects to have surveyed the entire city of Nairobi by June and is said to have already covered part of the central business district, Imara Daima, Lang’ata, Zimmerman, Jacaranda Gardens, Dagoretti, Ngong Road and Donholm estates to widen its tax net.

The Kenya revenue Authority is in talks with Safaricom to have Landlords pay rental through M-Pesa in a move to boost tax revenue.

The tax man now says landlords will soon have a mobile payment solution to settle their rental income tax even as it emerged that defiance was still high.

KRA Commissioner for Domestic Taxes Alice Owuor said the measure is among those the tax agency was employing to tap into the largely unexploited tax bracket of landlords.

“KRA is also currently engaging Safaricom to provide a simplified mobile solution (via M-Pesa) that will be linked to iTax to facilitate landlords to pay the tax at their comfort via their mobile phones like they do for utility bills. KRA will also engage banks for a possibility of landlords instructing their banks to be paying the 10 per cent tax on their behalf for any rental income received from their tenants,” Ms Owuor said in response to queries from Daily Nation.

The taxman expects to have surveyed the entire city of Nairobi by June and is said to have already covered part of the central business district, Imara Daima, Lang’ata, Zimmerman, Jacaranda Gardens, Dagoretti, Ngong Road and Donholm estates to widen its tax net.

THIRD PARTY INFORMATION

“KRA is already using third party information from national and county government institutions to identify property owners who are not tax compliant. So far, we have sent over 20,000 tax compliance notices to such landlords and we intend to send over 100,000 notices by May 2016,” Ms Owuor said.

Among the options available to the KRA in dealing with non-cooperative landlords are having tenants pay rent directly to the taxman until the debt is settled, taking any cash in the landlord’s bank account and, in extreme cases, seizing and auctioning the property.

The tax agency has in recent months been collecting information on landlords and plans to use the same to calculate taxes.